Leon's Furniture Limited Fundamental Analysis (TSX: LNF.TO)
Leon's Furniture Limited Fundamental Analysis (TSX: LNF.TO)
Leon's Furniture Limited (TSX: LNF.TO) shows moderate financial fundamentals with a PE ratio of 10.86, profit margin of 6.22%, and ROE of 12.76%. The company generates $2.5B in annual revenue with moderate year-over-year growth of 3.01%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 50.5/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze LNF.TO's fundamental strength across five key dimensions:
Efficiency Score
WeakLNF.TO struggles to generate sufficient returns from assets.
Valuation Score
ExcellentLNF.TO trades at attractive valuation levels.
Growth Score
WeakLNF.TO faces weak or negative growth trends.
Financial Health Score
ExcellentLNF.TO maintains a strong and stable balance sheet.
Profitability Score
WeakLNF.TO struggles to sustain strong margins.
Key Financial Metrics
Is LNF.TO Expensive or Cheap?
P/E Ratio
LNF.TO trades at 10.86 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, LNF.TO's PEG of -4.27 indicates potential undervaluation.
Price to Book
The market values Leon's Furniture Limited at 1.38 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 4.32 times EBITDA. This is generally considered low.
How Well Does LNF.TO Make Money?
Net Profit Margin
For every $100 in sales, Leon's Furniture Limited keeps $6.22 as profit after all expenses.
Operating Margin
Core operations generate 8.33 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $12.76 in profit for every $100 of shareholder equity.
ROA
Leon's Furniture Limited generates $6.45 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Leon's Furniture Limited produces operating cash flow of $308.26M, showing steady but balanced cash generation.
Free Cash Flow
Leon's Furniture Limited generates strong free cash flow of $273.04M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.96 in free cash annually.
FCF Yield
LNF.TO converts 15.89% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
10.86
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-4.27
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.38
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.68
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.38
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.59
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.13
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.11
vs 25 benchmark
How LNF.TO Stacks Against Its Sector Peers
| Metric | LNF.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 10.86 | 25.81 | Better (Cheaper) |
| ROE | 12.76% | 973.00% | Weak |
| Net Margin | 6.22% | -4892.00% (disorted) | Weak |
| Debt/Equity | 0.38 | 0.60 | Strong (Low Leverage) |
| Current Ratio | 1.59 | 2.32 | Neutral |
| ROA | 6.45% | 299.00% | Weak |
LNF.TO outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Leon's Furniture Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
35.22%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
12.22%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
-40.16%
Industry Style: Cyclical, Growth, Discretionary
Declining